Florida Gov. Ron DeSantis signed into law two bills targeting The Walt Disney Co. on Friday, eliminating the company’s special Reedy Creek district and stripping its exemption from the “Big Tech” social media bill.
Despite warnings from Orange County, Florida leaders and other experts that dissolving the district would cause financial chaos, raise local taxes and affect services, DeSantis insisted that “we’re going to take care of all that.”
“Don’t worry, we have everything thought out,” DeSantis said at a press conference in Hialeah. “Don’t let anyone tell you that somehow Disney is going to get a tax cut out of this, they’re going to pay more taxes as a result of that.”
But also on Friday, Fitch placed Reedy Creek Improvement District’s rating on a negative watch, citing a “lack of clarity” about how the district’s assets and liabilities would be allocated.
The negative watch means Reedy Creek’s credit ratings could be downgraded.
Fitch expects all property owned by the district, including its indebtedness, to be transferred to Orange County and to a lesser extent Osceola County or to a successor agency. The rating agency expects “the mechanics of implementation will be complicated, increasing the probability of negative rating action.”
The crowd at a Hialeah school booed when DeSantis first mentioned Disney, and the boos continued as he and other speakers pilloried the state’s largest single-site employer.
While the bill affects five other special districts, DeSantis was clear that Disney was the target, citing CEO Bob Chapek’s belated opposition to the so-called “don’t say gay’ bill.
That bill will prohibit discussion of sexual orientation or gender identity in schools up to the third grade and limits it to “age-appropriate” students in higher grades. Parents will also be able to sue school districts over the issue.
Republicans argued the bill protects parental rights, while Democrats and LGBTQ groups contend it was intentionally vague and could have a chilling effect on teachers, students and the LGTBQ community.
Chapek said he would pause all contributions to politicians in Florida and work to oppose similar bills in other states.
“I was very clear about saying, ‘You ain’t influencing me. I’m standing strong right here,’ ” DeSantis said Friday. “So it doesn’t matter. ... No big deal. We signed the bill.”
DeSantis then cited Chapek’s announcement that they would work to repeal the bill.
“Incredibly, they say, ‘We are going to work to repeal parents rights in Florida,’ ” he said. “And I’m just thinking to myself, you’re a corporation based in Burbank, California, and you’re going to marshal your economic might to attack the parents of my state. We view that as a provocation, and we’re going to fight back against that.”
Disney has been the target of much of conservative media over the last few weeks, with rhetoric labeling the company “groomers” and pedophile-enablers having become common. Two local Republican congressional candidates joined a protest outside Disney World earlier this month.
DeSantis claimed the company had “an intentional agenda to inject sexuality in their programming.”
The ratings affected by Fitch’s warning about Reedy Creek include $766 million of outstanding property tax-backed bonds, rated AA-minus, and $79 million of outstanding utilities revenue and refunding bonds, rated A. The utility’s credit profile rating of A and the district’s issuer default rating of AA-minus were also placed on negative watch.
“The Negative Watch reflects the lack of clarity regarding the allocation of the RCID’s assets and liabilities, including the administration of revenues pledged to approximately $1 billion in outstanding debt, following the dissolution of RCID or its re-ratification on or after June 1, 2023,” the announcement reads.
Fitch lowered its score for “Rule of Law, Institutional & Regulatory Quality, Control of Corruption” for the district from a five to a three “to reflect state actions to dissolve the district, which points to a substantially reduced degree of independence from political pressure.”
“These actions potentially diminish government effectiveness and could prove harmful to bondholders, which has a negative impact on the credit profile and is highly relevant to the Negative Watch action,” Fitch wrote.
Fitch said it would remove the negative watch if DeSantis didn’t sign the bill, which he did just hours later, or if “the dissolution plan preserves the credit quality and payment capacity of the respective revenue streams pledged to bondholders.”
“Prolonged uncertainty” would lead to a downgrade, Fitch concluded.
DeSantis also signed a third bill at the Friday event, the “Stop WOKE Act,” targeting critical race theory in schools.
President Biden slammed DeSantis and Republicans at an event in Portland, Oregon, on Thursday, saying, “the Far Right has taken over that party.”
“And it’s not even conservative in a traditional sense of conservative,” Biden said. “It’s mean. It’s ugly. It’s the way — look what’s happening down in Florida. ... They’re going after Mickey Mouse. I mean, seriously, think about it. As my friend used to say, ‘Who woulda thunk it?’ ”
